FREQUENTLY ASKED QUESTIONS

The implementation date for the RDR is 31 December 2012 though there is nothing to prevent IFAs implementing the requirements before then.

The minimum qualification requirement for investment advisers will be set at Qualifications Credit Framework (QCF) Level 4 or equivalent. Advisers currently holding Level 4 or achieving Level 4 exams will be allowed to fill any gaps between what they hold and the new standard through CPD rather through additional exams.

The Financial Services Skills Council will shortly be consulting on a new benchmark appropriate examination for retail investment advisers. The FSSC will then produce and maintain a revised list of appropriate examinations which satisfy these standards.

In the meantime, advisers taking existing Level 4 qualifications can do so on a 'no regrets' basis i.e. that any gaps between existing Level 4 and the new qualifications may be met by structured Continuous Professional Development rather than by further exams.

Details of existing Level 4 qualifications and providers can be found in the 'Raising the Benchmark' section

There will be no grandfathering, however, from 30June 2009 to 31 December 2012 only, there will be a transitional provision for existing investment advisers comprising an equivalent, rigorous oral version of the written industry examinations (covering the same technical content).

The introduction of the Adviser Charge brings about the end of commission on investment and pension products. The key proposals are:

• Firms should provide each potential client with their charging structure ahead of providing advice in the form of price list or tariff, outlining the services that they offer and the associated adviser charges
• The adviser will agree with the client the range of services to be provided and the Adviser Charge for these
• Adviser charges can be paid directly by a client as a fee (e.g. by cheque or direct debit) or paid as deductions from investments
• Ongoing charges should only be levied where a consumer is paying for an ongoing service, such as a regular review of their investments
• Providers can offer products at different factory gate prices (e.g. a network could negotiate a better deal for its members) but all of the benefit of this must be passed on to the client
• FSA plans to ban products that have 'negative charges' i.e. >100% allocation as these are less transparent and often hide other charges
• Providers do not need to offer facilities for deducting the Adviser Charge from a product i.e. will not remunerate advisers from their products
• Adviser firms will not be required to revisit business conducted before the deadline, and firms will be able to continue to receive ongoing remuneration payable on products sold beforehand

Only those operating on a whole of market basis may call themselves independent. The definition of whole of market is to be drawn much wider than current 'packaged products' so will include unregulated collective investment schemes, all investments in investment trusts, structured investment products and ETF.

Independent advisers will need to demonstrate that they have considered any suitable retail investment product and that they have sufficient knowledge of all types of relevant products that they might have to advise on.

Advisers who do not select from the whole of market (previously referred to as tied or mult-tied advisers) will have to use the term 'restricted advice'.

The Consultation Paper does not include any proposals to read across the RDR into other types of business. However, FSA has said that it is considering whether there is scope for wider application of any of the proposals across the general insurance and mortgage markets.

There is no cost to AIFA members in accessing the FF>>WD modules.  All of the resources are provided free to AIFA members.

We will include information about independent third parties for additional services that are not part of the core FF>>WD service but which firms may find useful e.g. qualifications providers such as the CII or IFS and who charge for these services.

AIFA appointed NMG, a specialist financial services consultancy, to lead the development of the site. All of the content of the site has been subject to review by an editorial board drawn from leading IFA firms and AIFA.

Zurich are the current sponsors of FF>>WD and are major supporters of the work of AIFA and the adviser industry.

AIFA maintains an ongoing dialogue with members to obtain feedback on a wide range of issues and to understand what support members want from them. One of the key areas where advisers have expressed a need for support has been in facing the challenges of transitioning their businesses in readiness for RDR. FF>>WD has been developed in direct response to this.

All the information that you enter onto FF>>WD will be confidential to you and will not be disclosed to any third party.

There is no set time to complete the programme and this will vary depending on the size of firm, the complexity of the business and how much of the programme is relevant to their circumstances. In developing FF>>WD we have taken into account the views of adviser firms that this should provide a rigorous framework for business transition but equally it should not be so onerous a process that adviser firms would struggle to complete it.

FF>>WD has been designed as a tool for you to use in your business. Therefore, you do not need to complete and submit any assignments.